For the three months that ended June 30, the chemical maker had net income of $34.6 million, up 35 percent over the $25.7 million reported for the like quarter of 1999. Last year's second quarter, however, included a $4.7 million after-tax loss from discontinued operations.

"We are pleased with our second-quarter results," said Paul J. Norris, chairman, president and chief executive of Grace, which is headquartered in Columbia. "Davison Chemicals delivered an outstanding quarter with nearly a 20 percent improvement in their earnings driven by sales growth and productivity."

Davison, also in Columbia, saw operating income rise 19.7 percent to $37.6 million. Sales rose 5.4 percent to $189 million. The Davison division produces silicas and catalysts used to accelerate the chemical reactions in oil refining.

Grace's Performance Chemicals of Cambridge, Mass., which produces construction chemicals and building materials, had sales of $195.6 million, up 1 percent. Its operating income, however, was down nearly 3 percent to $31.1 million. Its earnings were affected, the company said, by weather-related project delays and higher freight and petroleum-based raw material costs.

"We're having a really good year right now," said Robert M. Tarola, senior vice president and chief financial officer. "We beat [Wall] Street's estimates two quarters in a row and we're well on our way to meet sales growth targets and earnings growth targets for the year, so we're pretty bullish."

Grace is shooting for sales growth of 5 percent to 7 percent and earnings growth of 12 percent to 15 percent year over year.

Grace also announced yesterday that it bought the Hampshire Polymers Business, which has annual sales of more than $20 million. The company was owned by Hampshire Chemical Corp., a subsidiary of the Dow Chemical Co. The acquisition, the terms of which were not disclosed, will be folded into Grace Performance Chemicals. The purchase "expands the available market for Grace," Norris said.

Shares of Grace, which reported its earnings after the markets closed, were up 6.25 cents yesterday, closing at $11.6875.